Burberry Records Decline in Pre-Tax Profit for Fiscal Year 2024 as the British Luxury Firm Continues to Struggle to Revive its Business in a Weakening Luxury Goods Market. Profit dropped from 634 million pounds the previous year to 383 million pounds, the company reported on Wednesday. The adjusted operating profit, Burberry's preferred metric that excludes exceptional items, decreased from 634 million pounds the previous year to 418 million pounds.

The revenues declined from 3.09 billion pounds to 2.97 billion pounds, broadly in line with analysts' expectations of 2.94 billion pounds. Specifically, in Mainland China, Burberry saw a 19% decrease in comparable store sales in the fourth quarter, while the biggest luxury groups in Europe also struggle in the country, which for years was considered the industry's engine of growth.

Following a sharp increase in the purchase of luxury goods at the peak of the pandemic, growth slowed down last year, affected by high inflation and rising interest rates, which particularly burden younger and less affluent customers. In January, Burberry lowered its expectations for the fiscal year 2024, after the company had issued a profit warning in November, pointing to the ongoing weak demand in the luxury goods market.

For the fiscal year 2025, Burberry expects a challenging first half with a decline in wholesale revenue of about 25%, while in the last six months, the benefits of measures to support growth should become noticeable. The company has identified cost savings to offset the effects of inflation in the second half of the year.

With the appointment of Daniel Lee as Creative Director at the end of 2022, Burberry aims to rejuvenate its brand. However, Lee's designs, which hit the stores last autumn, did not perform well during the critical Christmas period when the company recorded a decline in sales. In the annual results, the company noted that it has improved brand perception and wishes to invigorate larger, core-focused collections.

The company proposed an unchanged final dividend of 61.0 pence per share.